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Huntsville, AL, Issues $190 Million in Health Care Bonds

By Munichain News Desk

The Health Care Authority of the City of Huntsville, Alabama, sold $190 million in bonds to finance capital improvement projects.

The bonds mature on June 1, 2053, and yield 3.75%. They are subject to mandatory tender on June 1, 2030. The securities received a rating of A1 from Moody’s Investors Service. 

The rating “reflects Huntsville’s strong and growing market position in northern Alabama which underpins its long-term stability despite industry-driven labor costs,” according to Moody’s.

The bond proceeds will fund the authority’s purchase of the Orthopaedic Center, an orthopedics, spine, and sports medicine practice with 14 locations in Alabama and Tennessee. The authority completed the acquisition of the Orthopaedic Center in June. 

The authority expects the acquisition to protect its outpatient practice, which is one of its most profitable components. Outpatient revenue generated 52.3% of total Huntsville Health Care system revenue in the fiscal year ending June 30, according to the official statement accompanying the sale of the bonds.

The purchase is the latest in a series of high-profile real estate transactions undertaken by the authority, totaling $100 million in investment. These include Governors Medical Tower, which is an outpatient medical center now affiliated with Huntsville Hospital, and Chase Industrial Park, a 211,000 square foot facility that houses the authority’s supply chain operations.

The bonds are general obligations of the authority, backed by its full faith and credit.

Wells Fargo Bank, NA, served as underwriter on the issuance, purchasing the bonds for $203 million. The price reflected a premium of $13 million.

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